Getting Serious About Sanctions-Busting Banks

If a firm like BNP Paribas is convicted of a criminal offense, it may be restricted in its ability to clear dollar transactions.

By

Roy C. Smith And

Ingo Walter

June 26, 2014 7:03 p.m. ET

BNP Paribas is expected any day to admit to criminal *violations of U.S. sanctions against Iran and Sudan. This is likely to mean that the giant French bank will pay a fine of between $8 billion and $10 billion to the U.S. government, dismiss several executives, and temporarily cease its dollar-clearing business. The case has dramatically elevated the liability of global banks to the regulatory enforcement of U.S. law.

Trade and financial sanctions have long had a place in international affairs—from the high-profile...